BNY Mellon Appeals Ruling in N.Y. Foreign-Exchange Suit

Sept. 6 (Bloomberg) -- Bank of New York Mellon Corp.
appealed a court ruling from last month ordering the company to
face a foreign-exchange lawsuit filed in 2011 by New York’s
attorney general.

BNY Mellon was sued in 2011 by Attorney General Eric
Schneiderman, who accused the bank of a 10-year fraud through
the pricing of foreign-exchange transactions. Manhattan U.S.
Attorney Preet Bharara also has a lawsuit pending against the
bank over the same issue, claiming it defrauded clients of more
than $1.5 billion. In April, a federal judge in New York
rejected the bank’s motion to dismiss the suit.

Justice Marcy Friedman of New York state Supreme Court in
Manhattan ruled on Aug. 5 that fraud claims brought by
Schneiderman can proceed, according to a decision dated
yesterday. Friedman dismissed some claims at issue in the state
case, including those for violations of state and city false
claims laws.

The bank today filed a notice of appeal of Friedman’s
ruling in the case, saying the judge’s opinion “was contrary to
law and should be reversed on several grounds,” including that
the state’s Martin Act doesn’t apply to “standing instruction
foreign-exchange transactions,” according to court documents.

“The Martin Act applies only to fraud concerning
transactions in ‘securities,’ which includes ‘stocks, bonds,
notes, evidences of interest or indebtedness or other securities
... or foreign currency orders, calls or options therefor,’”
lawyers for the bank said in the documents. “The statutory term
‘foreign currency order’ refers to a particular type of
negotiable instrument that investors can buy or sell, not a spot
transaction in foreign currency.”

The case is People of the State of New York v. Bank of New
York Mellon Corp., 114735-2009, New York state Supreme Court
(Manhattan).

To contact the reporter on this story:
Chris Dolmetsch in New York State Supreme Court in Manhattan at